Harvey Norman rings up growth

The nation’s largest electronics and white-goods retailer,
Harvey Norman
, said first-half sales rose 4 per cent on demand for cooking appliances and furniture, a sign that it had a good Christmas.

Revenue climbed to $3.27 billion in the six months ended December 31, with sales from outlets open at least a year gaining 2.5 per cent. The company said pretax profit rose more than 40 per cent, in line with its own forecast. The shares fell 10¢ to $3.62 on Friday.

Accelerating growth at the company’s stores in Australia is limiting the impact of declining demand in Ireland and New Zealand as chairman
Gerry Harvey
focuses on new technology products to drive profits.

“Harvey Norman’s sales result has bucked the trend of many retailers over the Christmas trading period," analyst Craig Woolford wrote in a note.

Harvey Norman also said sales in January had met expectations and it was “cautiously optimistic" about the next five months. Other retailers, including
Myer
, have expressed concern about the strength of sales this year without the government stimulus package that triggered a spending spree last year. Harvey Norman was a big beneficiary of the stimulus.

Myer said during the week it was discounting products to drive sales this half.

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Mrs Page said the flat-panel TV business had been competitive over Christmas but sales were solid. She said margins in certain categories such as gaming consoles and GPS units were being squeezed. Sales in the second quarter in the Australian outlets rose 6.8 per cent, up from 5.8 per cent in the fist quarter.

Sales in New Zealand and Ireland continued to languish at 2.5 per cent growth.

Mrs Page said she did not know when the Irish operations would become profitable. The country has been hit by a deep recession.

“Ireland is still a really tough market for us," she said.

“It appears to have bottomed at the moment and we are hoping that is the start of new dawn in Ireland."